Amazon.com and Foxconn are reportedly developing a
smartphone that would be competitive to Apple's iPhone and
other smartphones based on the Android OS, Bloomberg
reported today citing "people with knowledge of the
matter".

Amazon is also seeking to complement the smartphone
strategy by acquiring patents that cover wireless
technology, the report added. Adding patents would help
Amazon protect itself against lawsuits alleging illegal use
of technology.

Amazon has not commented on the report.

Last November, an analyst at Citigroup Inc. had also said that Amazon was
planning to release a smartphone.

A smartphone would further help Amazon make money from
digital books, songs and movies.

Amazon's move comes amid reports that the company is also eyeing production of the new tablets - all with 7-inch screens - timed for the holiday shopping season. These will be positioned against Apple's iPad mini, according to industry tracker DisplaySearch.